This is the result of a survey we conducted amongst the participants of the leading event for finance professionals in German-speaking Europe, SLG Finanzsymposium in Mannheim, Germany, June 10-12, 2015.
We wanted to find out which status working capital management has for companies today and in future, which corporate department is responsible and how working capital is managed. The results of our survey reveal some interesting trends which we gladly summarize here for you.
It is remarkable the over two-thirds of the respondents have already implemented working capital management as a permanent task in their company or are in the process of implementing it. In view of the importance of the subject, working capital management is mostly located in the treasury department and/or on top management level. Some participants even stated that they have a department specifically dedicated to working capital management.
The focus of capital commitment is rather equally divided between accounts receivable, accounts payable and inventory. The greatest potential for optimizing working capital is, however, is seen in the area of accounts receivable (including improvement of payment conditions).
Key figures are in most cases extracted from the balance and the profit & loss accounts. Only every third company reports working capital figures on the basis of transaction data that would provide a more comprehensives and exact overview to companies. The majority of respondents use existing ERR/SAP® systems or Excel® to conduct the reporting. Only few companies use business intelligence tools that generally enable a more flexible, detailed and accurate reporting.
Conclusion: working capital management is still considered as an important topic; more than two-thirds of the survey participants (the majority of them major corporations with annual turnovers > € 2 billion) are committed to it. For the reporting of key figures, however, most companies still use reference date evaluations (balance, P&L) which are limited in their information level. Transaction data would provide greater insight, but are only comparatively little used so far. This could be due the fact that only few companies use specific business intelligence tools today that would automate the evaluation of such transaction data and make them quickly available for reporting.
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